House Crypto Bill Targets Wash Sales and Mining Tax Deferrals
H.R. 10357 introduces a unified tax framework for digital assets, with a 30-day wash-sale rule set to raise $23.5 billion over a decade.
The House is advancing a comprehensive tax bill for digital assets. H.R. 10357, the Digital Asset Tax Certainty Act, is scheduled for markup on September 16. The legislation aims to align crypto taxation with traditional securities rules. It replaces fragmented guidance with a single framework.
The bill includes a provision to close the wash-sale loophole. This change is estimated to generate $23.5 billion in revenue over ten years. It prevents traders from claiming loss deductions on assets they immediately repurchase. The rule applies to all digital assets, not just specific tokens.
Wash Sale Rules Extend to Crypto
Current IRS rules exempt digital assets from wash-sale restrictions. H.R. 10357 extends Section 1091 rules to crypto. Selling an asset at a loss and rebuying it within 30 days no longer qualifies for a tax deduction. The disallowed loss adjusts the cost basis of the new holding.
This change ends the practice of loss harvesting and immediate rebuying. Traders can no longer pocket tax benefits while maintaining their positions. The rule treats digital assets like stocks and bonds for this specific purpose. It removes a significant advantage previously held by crypto investors.
Stablecoins are excluded from these restrictions. Qualified U.S. dollar-denominated stablecoins do not trigger wash-sale complications. This exemption recognizes stablecoins as digital cash rather than speculative instruments. It prevents compliance burdens on routine transactions involving these assets.
Mining Deferral Faces Political Hurdles
A separate bill, H.R. 9175, allows miners and stakers to defer taxes. Tax obligations would trigger only when tokens are sold, not when mined. This aligns with how labor income is treated in other sectors. It reduces cash flow pressure on producers during volatile market periods.
However, the mining deferral provision faces potential opposition. Republicans may scale back or remove this section before a final vote. The fate of this clause remains uncertain as the bill moves through committee. Stakeholders are monitoring legislative developments closely for changes to this provision.
Small Fee Exemption Simplifies Reporting
H.R. 10357 eliminates taxes on network fees under $10. This creates a de minimis threshold for minor transactions. It removes a compliance headache for active users. The rule applies to swaps, bridges, and standard transfers on blockchains.
The exemption does not apply to high-frequency traders. Users with more than 5,000 transfers in a tax year must report all fees. This cutoff targets bot operators and automated strategies. It ensures that algorithmic traders cannot use small-fee exceptions to avoid reporting obligations.
